An Airline That Wants You to Pay for the Gas

When businesses ship a package via United Parcel Service or FedEx, the freight companies assess a fuel surcharge based on market prices. The customer pays for the gas. Now ultralow-cost Allegiant Travel wants to try a similar approach on humans. Chief Executive Officer Maurice Gallagher Jr. would let fliers choose whether to lock in a set, higher fare or pay a lower ticket price in exchange for shouldering the risk that the cost of fuel may increase before they travel. Those dice-rollers would pay an additional amount—or receive money back—if energy costs changed in the period between booking and flying. Says Gallagher: “We’ll … stick our neck out and take on the [Department of Transportation] if this price of fuel continues.”

Unlike major airlines, Las Vegas-based Allegiant, founded in 1997, has virtually no last-minute business fliers, leaving it disproportionately dependent upon leisure travelers, who often book their trips to vacation cities such as Orlando, Las Vegas, or Phoenix months in advance.